Agroindustrial project analysi

AN OVERVIEW 7trialization occurs can greatly affect the significance and permanenceof the developmental stimulus agroindustries give to ruralcommunities. One critical element appears to be community participation.A United Nations Industrial Development Organization(UNIDO) Expert Group concluded that the "formulation of policiesand programmes of rural industrialization had to involve a muchgreater participation of the people in order to be effective." 6 Thegroup recognized that the rural population's lack of resources andlimited absorptive capacity would require special external assistanceto enable fuller participation and effectiveness.When backward linkages occur, they generally increase farmemployment. This is significant because agriculture remains theprimary employer in developing nations, whereas manufacturingemploys less of the labor force. This can be observed in LatinAmerica, where agriculture absorbs 38 percent of the labor forcebut accounts for only 15 percent of the gross national product(GNP), and where manufacturing absorbs 15 percent of the laborforce and accounts for 35 percent of the GNP . 7 The power of agroindustriesto use domestic resources is also illustrated in a studyof Costa Rica, which found that for every 100 colones sold, agroindustriesused 45.6 colones of national raw materials and nonagroindustriesused 12 colones.8A cornerstone of the manufacturing sectorThe importance of agroindustries in the manufacturing sectorof developing countries is often not fully realized. In most countriesfood and fiber processing constitute the foundation of thenation's industrial base. For example, in Central America agroindustriesaccounted for 78 percent of Nicaragua's manufacturingsector's output in 1971.9 In Asia, agroindustries in the Philippinesgenerated over 60 percent of the value added in the manufacturing6. UNIDO, Industrialization and Rural Development (New York, 1978), p. 8;also see Bejsin Behari, Rural Industrialization in India (New Delhi: VikasPublishing House, 1976).7. Inter-American Development Bank (nDB), Division of Agriculture, "Guideto Preparation of Agroindustrial Projects" (Washington, D.C., April 1974;processed), p. 1.8. Fernando Caldas, "Consideraciones sobre las agroindustrias en CostaRica" ["Considerations Regarding Agroindustries in Costa Rica"] (New York:UNIDO, August 1976; processed).9. Banco Central de Nicaragua, Informe Annual-1970 (Managua, 1971).